Ever since JPMorgan Chase disclosed a multibillion-dollar trading loss this month, the central mystery has been how a bank known for its skill at risk management could err so badly.
As early as 2010, the senior banker who has been blamed for the debacle, Ina Drew, began to lose her grip on the bank’s chief investment office, according to current and former traders. She had guided the bank through some of the most rugged moments of the 2008 financial crisis, earning the trust of Jamie Dimon, JPMorgan’s chief executive, in the process.
But after contracting Lyme disease in 2010, she was frequently out of the office for a critical period, when her unit was making riskier bets, and her absences allowed long-simmering internal divisions and clashing egos to come to the fore, the traders said.
This story was posted on The New York Times website on Saturday...and I thank Phil Barlett for sending it. It's an interesting read...and the link is here.
JPMorgan reported its first-quarter earnings on April 13. That’s when Mr. Dimon and Mr. Braunstein played down the problem, including with Mr. Dimon’s now-infamous remark that reports about the trades were a “complete tempest in a teapot.”
JPMorgan was clearly executing a strategy. The bank didn’t want its trader to become a wounded zebra on the savanna, attracting predators. Had the bank owned up to the problem right away, the losses could have ballooned as other investors piled in on the other side to force JPMorgan to let go of its positions at fire-sale prices.
JPMorgan executives spread the word, whispering in the ears of reporters and analysts, that hedge funds on the opposite side of the trade were in trouble. JPMorgan signaled that it wasn’t going anywhere. It had a big balance sheet behind these trades and could hold for a very long time. Its message: Hedge funds, you’re in trouble. Sell now.
“As they started to get some scrutiny, the last thing that they wanted was to admit that the journalists had been right,” said David Murphy, a risk management specialist at Rivast Consulting.
Now we realize the bank was bluffing. And it didn’t work.
This very interesting read was posted over at the propublic.org website late last week...and I borrowed it from yesterday's edition of the King Report...and the link is here.
Chief executive Jamie Dimon told investors that the bank was suspending its share buyback programme but would continue its dividend.
The decision came despite Mr Dimon reassuring investors just 10 days ago that it saw no reason to change its capital programme in the wake of the trading problems. Asked about share buybacks in a conference call he said they would not change.
On Monday, he tried to calm investor fears by stating he saw no “disaster scenario” for the bank coming from the trading controversy and was not “worried about the ultimate size of the loss”.
The statement came despite reports suggested the losses could top £4.4bn, more than twice the sum the bank had released.
One has to wonder just how big JPM's losses are going to add up to. Obviously they are going to get lots higher. This story was posted in The Telegraph during the New York lunch hour yesterday...and I thank Roy Stephens for his first offering of the day. The link is here.
JPMorgan Chase & Co. may face even bigger losses on faulty bets in credit markets if Europe’s debt crisis worsens, according to one of the hedge funds that took the other side of the trades.
“They’re not out of those positions,” Michael Platt, co-founder and chief executive officer of BlueCrest Capital Management LLP, said today in an interview on Bloomberg Television’s “Inside Track.” “If we end up with a catastrophe in Europe in the short run, they’re probably not positions that anyone would want to have.”
The bank’s positions were built by Bruno Iksil, a JPMorgan trader nicknamed the “London whale” because his bets had become so large, Bloomberg News reported on April 5. Traders on the other side, known as counterparties, say the market has since moved even further against JPMorgan.
It couldn't happen to a nicer bunch of crooks. This Bloomberg story was posted on their Internet site yesterday morning...and I thank West Virginia reader Elliot Simon for bringing it to our attention. The link is here.
China, which holds $1.17 trillion in U.S. Treasuries, still buys some Treasuries through primary dealers, but since June 2011, that route hasn't been necessary.
The documents viewed by Reuters show the U.S. Treasury Department has given the People's Bank of China a direct computer link to its auction system, which the Chinese first used to buy two-year notes in late June 2011.
China can now participate in auctions without placing bids through primary dealers. If it wants to sell, however, it still has to go through the market.
The change was not announced publicly or in any message to primary dealers.
While there is been no prohibition on foreign government entities bidding directly, the Treasury's accommodation of China is unique.
This longish Reuters story was posted on their website late yesterday evening. Washington state reader S.A. was the first one through the door with it...and I borrowed the headline from a GATA release. The link is here.
For once Russian President Vladimir Putin got it right; it wasn't worth turning up at Camp David for the G8 summit.
On the most urgent issue of the day, one that has already cost global stock markets $4 trillion and which threatens a recession that could make 2008 look like a bump in the road, they simply agreed to differ. Their bland communiqué concluded with pious hopes that Greece should remain within the euro and an agreement "that the right measures are not the same for each of us"...which is diplomat-speak for German Chancellor Angela Merkel digging in her heels.
Even the combined pressure of the other Western leaders at the G8 summit didn't move her. U.S. President Barack Obama stressed that the eurozone crisis was "of extraordinary importance." Italian Prime Minister Mario Monti, the only trained economist among them and who was asked to lead the discussion Saturday morning on the global economy, stressed the need to restore demand, saying, "I think we should regard it more positively than the most conservative European authorities do."
Grexit, the vogue term for a Greek exit from the euro, is slowly but surely becoming inevitable. The implications, for Europe and the global economy, are deeply alarming.
I consider this UPI story a must read...and it's Roy Stephens second offering of the day. The link is here.
Those readers who have been berating me for years for even considering the possibility of a country leaving the euro have recently fallen silent. (You know who you are.)
This week I want to move on from trying to forecast what even the most purblind of euro-fanatics now recognise as, to put it mildly, a very distinct possibility, to considering the consequences.
You may think this is premature. Personally, I have always thought that if you are going to be a forecaster you should specialise in being early.
So what would happen if Greece were to leave the euro? The short answer is that I don’t know. What’s more, neither does anyone else. Moreover, you should beware anyone who tells you otherwise.
This story appeared in The Telegraph on Sunday evening...and is Roy's third contribution to today's column. The link is here.
Financiers are becoming increasingly concerned that many taxpayer-backed borrowers are losing their ability to access private funding markets. The development raises the prospect of already heavily indebted eurozone national governments being forced to take on hundreds of billions of euros of additional debts.
“Cracks are appearing in the funding markets for these institutions. If you don’t like the sovereign risk, why would you take the risk of buying the debt of the institutions they support,” said one credit banker.
In France, the authorities are racing to avoid having to rescue Caisse Centrale du Crédit Immobilier (3CIF) after Moody’s downgraded the mortgage lender last week, warning it could become totally reliant on taxpayer support within months.
But the troubles at 3CIF are seen as evidence of far wider problems that are likely to face a range of quasi-government borrowers across Europe, as investors become more nervous about exposing themselves to the risk of a break-up of the euro area.
This story was posted over at The Telegraph on Sunday evening...and is another item courtesy of Roy Stephens. The link is here.
When the head of Greece's central bank, George Provopoulos, recently met with his European counterparts, the session turned into a confession. His fellow Greeks had just withdrawn €800 million ($1.022 billion) from their bank accounts, within just a few days. Consequently, at a meeting of the Governing Council of the European Central Bank (ECB) last Tuesday, Provopoulos had to ask for money -- once again.
Most Greek banks are currently cut off from the usual ECB lines of credit. They no longer have sufficient collateral. A number of banks are even currently operating without sufficient capital as a risk buffer for their activities. Indeed, Provopoulos had to accept last week that yet another crop of Greek banks were branded as unfit for ECB refinancing.
These zombie banks are being kept alive with help from the so-called Emergency Liquidity Assistance (ELA) -- a rescue aid program managed by Provopoulos. At every session of the Governing Council, he has to have these special allocations approved.
This story showed up on the German website spiegel.de yesterday...and once again I thank Roy Stephens for bringing it to our attention. The link is here.
Alexis Tsipras, the man who will very likely emerge again as the winner of the upcoming Greek parliamentary election, is campaigning throughout the country primarily under one slogan: "We won't pay any more."
He doesn't say what would replace the "barbarism of the austerity dictates," which he maintains that the European Union partners, above all German Chancellor Angela Merkel, have forced upon his country. He argues that the Europeans are only bluffing -- and he promises that they will continue to help, even if the Greeks no longer service their debts. He says: Elect me and all this misery will come to an end.
Stavros Lygeros, 59, is sitting in a café in the posh Athens neighborhood Neo Psychiko. Lygeros is a political commentator and a bourgeois intellectual. He's endeavoring to explain why the Greeks are following Tsipras in droves, although this young politician is clearly a seductive new star and his successful radical left-wing Radical Left Coalition (Syriza) cannot explain who will pay the future salaries of civil servants, doctors and nurses. Lygeros says that many Syriza voters don't even believe that this party has a solution.
If this isn't a train wreck in the making, I don't know what is. It's another Roy Stephens offering from yesterday's spiegel.de website...and the link is here.
Despite official claims to the contrary, the governments of the euro zone are threatening to kick Greece out of the currency union. At a meeting of euro-zone finance ministers last Monday in Brussels, it was made clear to Greek Finance Minister Filippos Sachinidis just how serious the situation had become.
"If we now held a secret vote about Greece staying in the euro zone," Euro Group Chairman Jean-Claude Juncker warned his Greek colleague, "there would be an overwhelming majority against it." Other participants in the meeting also had harsh words for Sachinidis, with particularly strong criticism towards Athens coming from Portugal and Ireland, countries that have also accepted bailouts in the crisis.
The countries say it is unacceptable that they have made serious efforts to fulfill the European Union's guidelines for consolidating their budgets while Greece incessantly breaks its reform agreements. It was the Greeks, they noted, who poured oil on the flames and repeatedly caused the whole euro zone to catch fire with their repeated negligence, other ministers added.
This story was posted on the spiegel.de website yesterday as well...and is Roy's final offering in today's column. The link is here.
A slowdown in China poses the biggest threat to the global economy and not a Greek exit from the eurozone, says economist and investor Marc Faber, publisher of the Gloom, Boom and Doom Report.
Greece is teetering on abandoning the eurozone, which could roil global markets.
Big deal, Faber says.
"I think the biggest risk is actually China because if you look at Greece, it's an insignificant economy," Faber tells CNBC Asia's "Capital Connection."
"Yes, they owe money, but the market knows that it's bankrupt."
This story was posted over at the moneynews.com website on Friday...and I thank reader 'Chris' for bringing it to my attention. The link is here.
The U.S. Commodity Futures Trading Commission proposed easing part of Dodd-Frank Act regulations limiting speculation in oil, natural gas, wheat and other commodities after industry groups said the original rules were onerous.
The CFTC’s five commissioners voted 5-0 in private to propose changing how companies aggregate trading positions when they have ownership stakes in other firms, the agency said in a statement today. The agency proposed raising to 50 percent from 10 percent the threshold for when a company is considered to have an ownership or equity stake in another firm and must add trading positions.
The proposal, which is open to public comment, would affect so-called position limits that were completed by the CFTC in October as part of an effort to reduce excessive speculation in commodities. The limits, which cap the number of contracts a trader can have in a market, prompted a lawsuit by the International Swaps and Derivatives Association Inc. and the Securities Industry and Financial Markets Association.
“I support the commission’s proposed rules that, among other things, expand the exemptions relating to information sharing restrictions, expand the circumstances under which market participants will not be required to aggregate positions,” Jill E. Sommers, a Republican commissioner, said in a statement today.
Quite a number of people weren't happy when this Bloomberg story showed up late on Friday afternoon...and I was one of them. I ran it past Ted Butler...and he says he's rather disturbed by it as well, but he said that it all depends on who has "trading control" of all these futures contracts that will fall under this revised regulation. We'll find out soon enough. I thank Dr. Dave Janda for being the first through the door with story. It's worth reading...and the link is here.
As the Missouri General Assembly pushes toward adjournment, a bill that originally aimed at exempting gold investors from capital gains taxes has now transformed into the Missouri Sound Money Act of 2012, which would make gold and silver legal tender within the state.
The legislation would also eliminate several state taxes on gold and silver, including capital gains and sales taxes.
House Bill 1637 would allow the establishment of sound-money depositories that would allow citizens to deposit precious metals and use debit cards to pay bills out of those accounts. The depositories would be regulated by Missouri's Secretary of State.
This story was posted over at the mineweb.com yesterday...and I thank reader 'David in California' for sending it along. The link is here.
The first is with Egon von Greyerz. It's headlined "Customer Shocked "Allocated" Gold Not in Swiss Bank". The second blog is with Stephen Leeb. It bears the title "Israel Prepping for War, Junior Gold Shares Set to Soar". And lastly is this interview with Agnico Eagle CEO Sean Boyd. It's headlined "Agnico CEO Calls for $3,000+ Gold for the First Time Ever".
I've read articles from more than one analyst claiming that gold stocks are down on low volume, implying there's a lack of interest in precious metals. While on the surface that seems like an obvious statement, their point is that most of the recent volume has been coming from sellers and thus exaggerating the recent decline.
I decided to test this hypothesis, because if correct, it has investment implications, starting with the fact that at some point you run out of sellers; and if and when buyers return, the ensuing rise could be spectacular.
Senior precious metals analyst, Jeff Clark, has this must read piece posted in yesterday's edition of Casey's Daily Dispatch...and the link is here.
MineWeb's Lawrence Williams reports on Sprott Asset Management CEO Eric Sprott's address to the New York Hard Assets Investment Conference last week, which stressed market manipulation by governments and credited GATA for helping to expose it in gold.
I borrowed the headline and the introductory paragraph above from Chris Powell's GATA release yesterday. Williams' report is headlined "Sprott Sees Great Things for Gold and Silver" and it's posted at MineWeb's Internet site here. Anything that Eric has to say is a must read in my opinion...and this piece is no exception.
Gold bushwhacked the bears last week. It's even got gold bugs talking about gold stocks ... again.
After breaking gold bugs' hearts by plunging to a new low for the year on Thursday, gold violently reversed. Measured by the CME floor close, the benchmark gold contract gained $38.30 on the day. It followed up on Friday by adding another $17, for a two-day gain of 3.31%.
The NYSE Arca Gold Bugs Index (HUI) jumped 5.29% in these two days.
Gold stocks' outperforming the metal is significant, because they have been atrocious this year. As of Friday's close, the HUI was down 20.5% on the year, while gold was actually up 1.4% on the year. Just a restoration of late 2011's multiples could produce serious gains.
If gold's reversal sticks, it will be a triumph for the contrary opinion sentiment indicators. Nothing else had been offering any comfort.
This story showed up at the marketwatch.com website yesterday...and is well worth reading. It's another story I pulled from a GATA release...and the link is here.
Interviewed by GoldMoney founder James Turk, Sprott Asset Management's John Embry remarks that "if you're negative on gold, you must be bullish on currency, and I don't see how anyone can make that argument."
The comment is part of a conversation about how the bull market in gold is far from over. Video of the interview is 33 minutes long...and needless to say, I consider it a must watch. It's posted over at the GoldMoney Internet site here.
Facebook's life as a public company got off to a faltering start as technology glitches delayed the opening of trading and underwriters had to intervene to prevent its shares falling below the $38 issue price set on Thursday.
The stumbles, however, did not stop the company from celebrating the successful conclusion of the third largest initial public offering in US history on Friday. The $16 billion it raised trails only Visa's IPO in 2009 and a GM share issue in 2010.
Facebook's closely-watched Wall Street debut defied predictions of a spike in first-day trading and contrasted with the scene at its Menlo Park campus just two hours earlier, when founder Mark Zuckerberg pressed the Nasdaq opening bell and employees exchanged high-fives and hugs.
No surprises here, dear reader...and Doug Noland has more to say about it in his Credit Bubble Bulletin a bit further down. This story appeared in the Financial Times yesterday...and is posted in the clear in this GATA release...and the link to this worthwhile read is here.
The U.S. sold $13 billion of 10-year inflation-indexed notes at a record negative yield with investors willing to pay a premium to guard against the threats of rising consumer prices and Europe’s worsening debt crisis.
The Treasury Inflation Protected Securities were sold at a so-called high yield of negative 0.391 percent, the third consecutive auction where investors paid the government to hold their money. TIPS pay interest at lower rates than regular Treasuries on a principal amount that’s adjusted based on the Labor Department’s consumer price index.
While yields on Treasuries due in 10 years or less are below the pace of inflation, demand is at record highs for U.S. government debt amid competition for a dwindling supply of the safest assets. The International Monetary Fund said last month that the amount of global assets that investors consider “safe” will shrink by $9 trillion by 2016.
This Bloomberg story was posted on their website early Thursday afternoon...and I thank West Virginia reader Elliot Simon for sending it along. The link is here.
Interviewed yesterday by CNBC, geopolitical analyst James G. Rickards said JPMorganChase CEO Jamie Dimon should resign as "a point of honor" over the firm's huge recent trading losses in London. Rickards argues that the losses essentially rip off the public insofar as Morgan is a beneficiary of the monstrous transfer of wealth from savers to banks that has been implemented under the Federal Reserve's zero interest rate policy.
I borrowed the title and the introductory paragraph from a GATA release yesterday. This must watch 6:35 minute video clip was posted on the CNBC website on Thursday afternoon...and is linked here. You could tell that Rickards was not a happy camper!
Another Federal Reserve policymaker on Thursday called for the break-up of big banks like JPMorgan Chase & Co., saying that firm's recent large trading loss underscores the difficulty of regulating such banks and the dangers they pose.
"This is why you want these companies to have plenty of capital," St. Louis Fed President James Bullard said in response to questions after a speech to a Rotary Club. "I would back my colleague (Dallas Fed President) Richard Fisher in saying that we should split up the largest banks."
Bullard's comments echo those of Fisher, who advocates breaking up the five largest U.S. financial institutions. Fisher said in the wake of revelations that JPMorgan had reported $2 billion in losses due to derivatives trades that he is worried that the biggest banks do not have adequate risk management.
Bullard told reporters that his call for breaking up big banks includes JPMorgan.
This story was posted over at the moneynews.com website on Thursday afternoon...and is another offering from Elliot Simon. The link is here.
Working at my desk today was somewhat surreal. Global risk markets were closing out a dreadful week. Newswires were full of disconcerting articles – J.P. Morgan, Greece, Spain, Italy, China, etc. Meanwhile, CNBC was in the midst of blanket coverage of the Facebook initial public offering. Mark Zuckerberg rang the bell to open Nasdaq trading, while helicopters provided live video of the employee gathering at Facebook’s Menlo Park headquarters. Insiders are now worth billions, the “average” employee millions. Even U2’s Bono pocketed $1.2bn (with a “B”). I noted above how I see J.P. Morgan’s predicament as a microcosm of global financial woes. Well, it is difficult for me today not to see Facebook as emblematic of the incredible transfer of wealth associated with Credit Bubbles. It’s almost as if this historic Bubble has been waiting to end with just such an exclamation point.
Yesterday's edition of the Credit Bubble Bulletin from Doug Noland was posted on the prudentbear.com Internet site yesterday evening...and is an absolute must read. I thank reader U.D. for sending it our way...and the link is here.
Following the downgrade of 16 Spanish banks by Moody's, the focus in the euro crisis is back on the banking sector. Greeks are withdrawing hundreds of millions from their accounts, with reports that the same is happening in Spain. Experts are calling on the European Central Bank to step in and prevent full-scale bank runs.
The final wake-up call came from Moody's. On Thursday evening, the US rating agency downgraded 16 Spanish banks in one fell swoop, some of them by three notches. On Monday, the agency had already downgraded 26 Italian banks -- including major institutions such as UniCredit and Intesa Sanpaolo. The outlook for all the institutions involved is negative, Moody's said.
These are drastic steps, but they are hardly excessive. The European sovereign debt crisis long ago also became a banking crisis. The fate of the affected countries can not be separated from that of their financial institutions: If a state goes bankrupt, its banks too will struggle to survive. On the other hand, the examples of Ireland and Spain show that a shaky banking system can quickly overwhelm national budgets.
This story was posted on the German website spiegel.de yesterday...and I thank Roy Stephens for sending it along. The link is here.
During the election campaign, French President François Hollande threatened to slap an income tax rate of 75 percent on high earners. Since then, wealthy French have been looking for ways to get themselves and their money out of the country. And nowhere looks more attractive than millionaire-friendly London.
It began in 2010, when wealthy Greeks started coming to London and buying up expensive townhouses in upmarket neighborhoods. Amid fears that Greece might leave the euro zone, they believed their money would be safe in Britain in its splendid isolation from the euro and the Continent's sovereign debt crisis.
Then rich Spaniards started arriving. They were following by well off Italians, who at the start of the year overtook Russians as the biggest group of foreign buyers snapping up property in London, according to a survey.
Whenever the euro crisis heats up somewhere in Europe, the demand for expensive homes increases in Western Europe's largest city particularly among well-heeled foreigners beset by asset angst.
This is another Roy Stephens offering from the spiegel.de website...and the link is here.
They stand on imposing headlands with spectacular views of isolated bays and white sandy beaches, some of the most picturesque in the Mediterranean.
But now, as Italy tries to chip away at its mountainous public debt and assuage the concerns of international markets, more than a dozen lighthouses around the coast of Sardinia are to be leased out as boutique hotels, quirky bed and breakfasts, galleries and museums.
The plan comes as the six-month-old technocrat government of Mario Monti, the prime minister, forges ahead with an unpopular programme of tax hikes, labour and pension reforms and other much-needed measures to tackle the country's €1.9 trillion (£1.5 trillion) public debt, the highest in Europe.
The lighthouses are being put up for lease by Sardinia's autonomous government, which says it can no longer afford the cost of maintaining the historic structures, let alone restoring them. The cost of leasing them is not yet known – the Sardinian authorities say they will be auctioned off at "market rates" in the coming weeks.
This is Roy's third offering in a row. This one was posted on The Telegraph's website yesterday afternoon...and the link is here.
Just when we though that nobody would take advantage of the cover provided by the epic flame out of the FaceBomb IPO and the ongoing market crash, here comes Spain.
Because there is nothing quite like a little Friday night action following a market drubbing and an "IPO for the people" shock in which to sneak the news that, oops, sorry, we were lying about all that austerity.
Because while it came as a surprise to the market back in December when Spain announced it would post a 2011 budget deficit of 8.5% instead of the previously promised 6%, the market will hardly be impressed that Spain actually overspent by another €4.2 billion, to a brand new total of €95.5 billion of 8.9% of GDP.
This zerohedge.com story was posted on their website early yesterday evening...and is another offering from Roy Stephens. The link is here.
This "Capital Account" video was posted on the Russia Today website on May 9th, but it's still relevant nonetheless. The commentary/interview with Nigel starts at the 2:00 minute mark. I thank Roy Stephens for sharing it with us. It's well worth watching...and the link is here.
There will be no magic wands waved at Camp David this weekend. The euro crisis will be as intense on Monday as it is now and the G8 is extremely limited in what it can do, beyond talk.
The recipe for euro unity is sovereignty sacrifice among each of its 17 members but that prospect is behind the political revolt being witnessed across European cities.
Europe’s financial crisis will keep rolling with the Spanish financial system undergoing defibrillation, Portugal and Italy on the waiting list.
There’s now a month long hiatus before the next Greek election on June 17, which could offer eurozone politicians an opportunity to reconvene and try and reassure markets. But is there any point? To the few remaining fans of the euro, any straw is worth clutching to.
This story from The Telegraph was posted during the London lunch hour yesterday...and is another contribution from Roy Stephens. The link is here.
Here's some straight talk from economist Ann Pettifor. Ann witnessed the default in Argentina and says Greece will become extraordinarily competitive after it cleans its house. This 5:46 minute video interview is well worth your time. This clip was sent to me by Wesley Legrand...and it was posted on the Australian Broadcasting Corporation website on Wednesday. It's refreshingly candid...and well worth your time. No flies on her. The link is here.
The first is headlined "Japan questions jurisdiciton of U.S. court order freezing Iran assets". The second story bears the headline "Medvedev warns against a nuclear war in Mideast". And lastly is this story headlined "Iran will not relinquish one iota of its nuclear rights: Jalili". All three stories are courtesy of Roy Stephens once again.
Chinese companies are operating with "alarming levels" of corporate debt, even though the country's gross debt remains relatively low, according to a study by a top Chinese think tank.
"The high level of corporate debt deserves our attention," warned Li Yang, vice president of the Chinese Academy of Social Sciences (CASS), at an annual public conference held by the International Organization of Securities Commissions (IOSCO), which concluded in Beijing Thursday.
After a one-year study on China's government debt, corporate debt and individual borrowing, a research team led by Li will publish their research results next month, as well as submit the results to the International Monetary Fund.
China's debt levels are still rising and will continue to climb in the future if the current global financial crisis persists, Li said at an IOSCO panel discussion regarding securities regulation in emerging markets.
This story, filed from Beijing, was posted on the chinadaily.com.cn Internet site yesterday...and I thank Hong Kong reader Graham C. for sending it along. The link is here.
When metals warehouses in top consumer China are so full that workers start stockpiling iron ore in granaries and copper in car parks, you know the global economy could be in trouble.
At Qingdao Port, home to one of China's largest iron ore terminals, hundreds of mounds of iron ore, each as tall as a three-storey building, spill over into an area signposted "grains storage" and almost to the street.
Further south, some bonded warehouses in Shanghai are using carparks to store swollen copper stockpiles - another unusual phenomenon that bodes ill for global metal prices and raises questions about China's ability to sustain its economic growth as the rest of the world falters.
This Reuters story was filed from Qingdao, China yesterday...and I thank reader Andrew Holland for bringing it to my attention. The link is here.
While gold may not go up vertically from here—as frequent readers know, the yellow metal historically has fallen in June and July—with the extraordinary events occurring in Europe, I believe investors will soon “friend” gold once more. As we wait for the central banks around the world to act, I encourage investors to consider dollar-cost averaging. It’s a way to stay invested, and more importantly, to avoid making emotional investment decisions.
Frank has several things to say about gold...and they're found scattered through this commentary that was posted on his usfunds.com Internet site yesterday. I thank Elliot Simon for his third offering in today's column...and the link is here.
Roiling capital markets aren't going to calm any time soon so investors would be better off putting their money in hard assets like gold, silver and agricultural commodities, says international investor Jim Rogers.
Greece is teetering on the brink of default, while the debt crisis appears to be spreading to Spain, as evidenced by a Moody's decision to cut ratings on 16 banks there.
"The world's got serious problems facing it, I don't particularly like saying it, but it's true," Rogers told CNBC.com.
"Unfortunately there will be more debt and currency turmoil to come."
Last week Jimmy said that gold might drop precipitously...and he wasn't a buyer. Now he's got both arms and legs wrapped around the stuff. I never consider Rogers a good indicator for gold, as he doesn't hold the metal with any conviction. He sounds a little like Dennis Gartman in that respect.
I thank reader Lou Horner for sending me this piece that was posted over at the moneynews.com website yesterday...and the link is here.
The first is with Hinde Capital Management CEO, Ben Davies. It's headlined "The Gold & Silver Liquidation is Over". The second blog is with Eric Sprott...and it bears the title "Governments Frightened of Panic Liquidation Event". Both of these blogs are well worth your time.
We left off yesterday wondering why the market had turned on gold recently - the supposed "safe haven" metal. But we woke up this morning and saw things had turned again...gold surged 2% overnight as the US markets sank around 1.5%.
No doubt this type of price action will confound many investors...especially those who sold in a panic in the last few weeks. The recent sell-off amongst the gold stocks is up there with 2008 for severity.
In a clear example of how the emotional decisions of investors send price diverging from value, gold stocks have plummeted while the Aussie dollar gold price, which, along with production, determines revenue, is only slightly lower.
The gold price certainly does move in mysterious ways. Today our task is to try and work out why. To do so, we need to look into the mysterious world of the London gold market.
This article was posted over at the dailyreckoning.com website yesterday...and I thank Wesley Legrand for sharing it with us. The link is here.
Gold will need a higher price to sustain mine production, says Gold Fields CEO Nick Holland.
Announcing lower net group March quarter earnings of R2 082-million ($268-million) compared with higher December quarter earnings of R2 605-million ($336-million), Holland puts the all-in cost of producing an ounce of gold at $1 400 and says the gold-mining industry will need prices higher than the current $1 500/oz to maintain output at 70-million to 75-million ounces a year.
“If we’re going to replace the ounces being mined out…we’re going to need higher prices,” he says, adding that analyst forecasts need to be moderated upwards.
This story was filed from Johannesburg on Thursday...and was posted over at the miningweekly.com website...and my thanks to reader Richard Murphy for sending it. The link is here.
Goldcore’s Mark O’Byrne was interviewed by Bloomberg yesterday discussing the World Gold Council Report, Gold Demands Trend (Q1 2012) - Enter The Dragon, on demand in Asia. “We could be witnessing a paradigm shift from China on bullion demand”, Mark O’Byrne also notes, “that the gold market was liberalised in China in 2003 and prior to that gold ownership was banned in China by Chairman Mao. The per capita consumption of 1.3 billion Chinese consumers, investors and central bank demand are very significant."
This interview was posted on the Bloomberg website on Thursday...and runs for 4:42 minutes. It's Roy Stephens final offering in today's column...and the link is here.
Turkish gold sales to Iran in March soared over 30 times and gold companies said Iranians were turning to gold for savings and possibly trade as Western sanctions tighten.
Sanctions to force Iran to curb its nuclear programme have targeted its energy and banking sectors and new measures from both the United States and European Union take effect in July, aimed at strangling Tehran's foreign earnings.
The sanctions have made neighbouring Turkey an ever more important channel for the Islamic republic.
Data from Turkey's Statistics Institute on Thursday showed gold exports to Iran rose to nine tonnes, worth $480 million, in March, from 286 kg a year earlier and compared to just 30 kg in February this year.
This Reuters story was filed from Istanbul on Thursday...and bears the headline "Turkish Gold Sales to Iran Soar as Sanctions Bite". I found this story in a GATA release yesterday...and the link is here.
The unit at the centre of JPMorgan Chase's $2 billion trading loss has built up positions totalling more than $100 billion in asset-backed securities and structured products -- the complex, risky bonds at the centre of the financial crisis in 2008.
These holdings are in addition to those in credit derivatives that led to the losses and have mired the bank in regulatory investigations and criticism.
The unit, the chief investment office (CIO), has been the biggest buyer of European mortgage-backed bonds and other complex debt securities such as collateralised loan obligations in all markets for three years, more than a dozen senior traders and credit experts have told the Financial Times.
This Financial Times story was posted on their website shortly after midnight...and is posted in the clear in this GATA release...and the link is here.
Details continue to emerge regarding JP Morgan's shocking multi-billion trading losses.
However, the biggest behind-the-scenes report so far was just published by The Wall Street Journal and written by Monica Langley.
Here's how Dimon first found out about the losses: On April 30, associates who were gathered in a conference room handed Mr. Dimon summaries and analyses of the losses. But there were no details about the trades themselves. "I want to see the positions!" he barked, throwing down the papers, according to attendees. "Now! I want to see everything!"
When Mr. Dimon saw the numbers, these people say, he couldn't breathe.
This story was posted on the businessinsider.com website late yesterday evening...and I thank Roy Stephens for sending it along. The link is here.
Just when you thought that bankers didn't have a soul, here's a 2:32 minute video clip from ABC News that will warm the cockles of your heart. Of course he's not a New York banker, so that's probably one of his saving graces. It's cute and definitely worth watching. I thank reader Brad Robertson for sending it along...and the link to the youtube.com video is here.
Something funny happened in the aftermath of the US fraudclosure settlement, in which millions of backlogged housing units were supposed to enter the foreclosure process and begin the clearing of the nearly 9 million housing units in shadow inventory: nothing.
Because as RealtyTrac disclosed overnight, in April the US saw a mere 188,780 foreclosures events of various type (NOD, auction, REO) take place. Why is this number significant? Because it is the lowest in 5 years, despite shadow inventory in the US now being virtually the highest ever.
This zerohedge.com posting from yesterday was sent to me by Casey Research's own Alex Daley, for which I thank him...and the link is here.
Hewlett-Packard Co. is considering cutting as many as 25,000 jobs, or 8 percent of its workforce, to reduce costs and help the company contend with ebbing demand for computers and services, people briefed on the plans said.
The number to be cut includes 10,000 to 15,000 from Hewlett-Packard’s enterprise services group, which sells a range of information-technology services and has been beset by declining profitability, said these people, who asked not to be identified because the plans aren’t final and may change.
Meg Whitman, chief executive officer since September, is seeking to reverse the growth slump that led to the ouster of her predecessor, Leo Apotheker. The company’s PC sales are dropping as consumers favor tablets, such as Apple Inc.’s iPad, and it has been slow to adapt to the shift toward cloud computing, away from the IT services Hewlett-Packard provides.
This Bloomberg story was courtesy of reader 'David in California'...and the link is here.
A survey of manufacturing activity from the Federal Reserve's Philadelphia branch tumbled to -5.8 this month from 8.5 in April, where any reading below zero signals contraction.
Although Thursday's survey only covers Pennsylvania and surrounding states, economists take it as an early reading on America's wider manufacturing industry.
The steep decline comes as Europe's escalating debt crisis dominates thinking in Wall Street and Washington. Federal Reserve policymakers cited the region's woes at the central threat to the US recovery this week.
Should the drop in the manufacturing index prove to be the start of a run of weaker activity, economists expect Federal Reserve chairman Ben Bernanke to take further measures to help the economy.
This story was posted in The Telegraph yesterday evening...and it's Roy Stephens second offering of the day. The link is here.
Italy increased security Thursday at 14,000 sites, and assigned bodyguards to protect 550 individuals after a nuclear energy company official was shot and letter bombs directed to the tax collection agency.
Under the enhanced measures, Interior Minister Anna Maria Cancellieri deployed 20,000 law enforcement officers to protect individuals and sensitive sites. In addition, 4,200 military personnel already assigned throughout Italy will be redeployed according to new priorities.
"Based on a thorough analysis of the situation, Interior Cancellieri has confirmed the need to maintain a high level of vigilance, strengthen the security measures against sensitive targets and those exposed to specific risks," the Interior Ministry said in a statement.
This AP story was filed from Rome yesterday...and was posted in The Atlanta Journal-Constitution. I thank reader 'David in California' for his second offering in today's column...and the link is here.
The European Central Bank has stopped providing liquidity to some Greek banks as they have not been successfully recapitalized, the ECB said on Wednesday, confirming news earlier reported exclusively by Reuters.
The news sent the euro lower against the dollar, fanning concerns among investors and in Greece that the country may have to leave the euro zone.
The development highlights the weak state of the banking sector in Greece, where Greeks are pulling euros out of the banks in fear that their country may exit the European single currency despite the declared determination of EU powers Germany and France to keep Athens in the monetary union.
This Reuters piece filed from Berlin and Frankfurt was posted on their website Wednesday afternoon...and I lifted it from yesterday's King Report. The link is here.
Bank of America said it expects a "powerful short squeeze" in risk assets as speculative funds unwind positions, led by a rebound in battered bank stocks and Club Med bonds. The euro would surge 10pc to $1.40 against the US dollar after dipping first to $1.20 in the immediate panic.
The benign outcome assumes that the European Central Bank steps in with massive support, backed by the US Federal Reserve, the Bank of Japan, and key central banks along the lines of concerted action in 2008-2009.
Bank of America said EU authorities will pull out the stops to keep Greece in the system as they weigh the full dangers of contagion. Should that fail, it expects a series of dramatic moves.
"The global central banks are going to respond with the biggest flood of liquidity the world has ever seen. It will make the LTRO (the ECB's €1 trillion lending to banks) look like small change."
This story was posted on The Telegraph's website early yesterday evening. I thank Nick Laird for bringing it to our attention...and it's a must read. The link is here.
Spain moved back into the eye of the eurozone storm on Thursday, as the country’s borrowing costs rocketed to unsustainable levels and the country's banking sector was hit by mass downgrades.
Moody's slashed the ratings of 16 Spanish banks on Thursday evening, citing the reduced ability of the Spanish government to provide support to the sector, as well as the "adverse operating conditions" characterised by a renewed recession.
The rating agency also downgraded Santander UK, although, at "A2," it is still rated one notch above its parent bank Banco Santander. Moody's highlighted that Santander UK has "no direct exposure to the Spanish government (or regional governments)".
Earlier in the day, shares in Bankia, the country’s fourth biggest bank, plunged by as much as 29pc amid reports that depositors had pulled out €1bn in the past week.
This story was posted in The Telegraph late Thursday evening...and I thank Roy Stephens for bringing this article to our attention. The link is here.
Sir Mervyn said the recovery would be "slow and uncertain" as the economy tried to navigate its way through a potential "storm heading our way from the continent."
"We have been through a big global financial crisis, the biggest downturn in world output since the 1930s, the biggest banking crisis in this country's history, the biggest fiscal deficit in our peacetime history, and our biggest trading partner, the euro area, is tearing itself apart without any obvious solution," Sir Mervyn King said.
This video, posted over at The Telegraph late Wednesday afternoon, runs 2:22 minutes...and is worth watching. I thank Roy Stephens for his final offering in today's column...and the link is here.
China's "Big Four" banks made almost no new loans in the first two weeks of May, after a surprise drop in new loans in April, highlighting liquidity strains that have persisted despite the central bank's monetary easing.
Citing an unidentified insider, the China Securities Journal reported that two of the banks saw only minor loan growth of less than 10 billion yuan ($1.59 billion), while new lending actually contracted at the other two. The article didn't say which banks fell into either category.
The "Big Four" - Industrial & Commercial Bank of China Ltd, China Construction Bank Corp, Bank of China Ltd and Agricultural Bank of China Ltd - usually account for 30 percent of new yuan loans each year.
The dismal performance followed an overall drop in new loans last month. Financial institutions in China extended 681.8 billion yuan of loans in April, a sharp fall from 1.01 trillion yuan in March and far below market expectations.
This story showed on the chinadaily.com.cn website early yesterday morning...and I thank Hong Kong reader Graham C. for sending it along. The link is here.
Spot gold rallied more than 2 percent on Thursday for its largest one-day gain since late January, as technical buy signals and new signs of a sluggish U.S. economy more than offset deepening despair over the euro zone.
After flirting with a bear market on Wednesday, down more than 20 percent from its September record, bullion rallied early after Philadelphia Federal Reserve data showed a contraction in factory activity in the U.S. mid-Atlantic region. The data rekindled some hope the Fed would plow more money into the system to stimulate the economy, traders said.
The dramatic $24 bolt higher started just before the release of the Philly Fed statement at 10:00 a.m. EDT (1400 GMT) and continued for about 20 minutes, accompanied by a spike in volume.
This Reuters story was filed from New York yesterday...and was posted over at the finance.yahoo.com website. I thank reader Peter Handley for sending it...and the link is here.
As African governments seek to extract more revenue from their mining sectors, the continent's biggest economy has given gold producers a much-needed tax break that removes at least one head wind from a struggling industry.
Gold Fields, the world No. 4 bullion producer, on Thursday became the latest South African gold miner to report better-than-expected earnings partly on the back of the new, lower tax regime. It benefited to the tune of close to 1 billion rand ($120.46 million) from the change in the first quarter.
The companies' gain will cause some shareholder pain as the burden has been partly sifted to dividends, but analysts generally agree that the Treasury's revenue stream from the gold sector will be less as a result.
This Reuters story was filed from Johannesburg yesterday...and I plucked it from a GATA release late last night. The link is here.
The first is with Peter Schiff...and it's headlined "The Market Rollover, QE3 Bottom & Gold". The next blog is with Citibank analyst, Tom Fitzpatrick. It bears the title "Despite Pullback, Gold to Hit New All-Time Highs". And lastly is this commentary with Mike Roth who, according to Eric King, is the "Number 1 oil analyst in the world." It's headlined "Fears of '08 Credit Metldown Impacting Markets".
One of gold’s greatest powers is that it is a unit of account which cannot be fudged nearly as easily as the fiat all-you-can-print buffet.
But gold is still gold. It’s still that same shining yellow metal that investors have for thousands of years held up as a unit of account and store of value, and a medium of exchange.
Central bankers can’t just abolish history. On the other hand, history may very well abolish the central bankers and their fiat currencies.
I've never heard of the author...John Azia of Azizonomics...however his short commentary, with some really incredible graphs, was posted over at the zerohedge.com website yesterday...and is a must read. I thank Australian reader Wesley Legrand for sending it to me...and the link is here.
In his presentation at the New York Hard Assets Conference, market analyst and mining company consultant Peter Grandich says gold will never find respect from the financial and news media establishment even though its performance over the last decade far exceeds any other asset class. He maintains that gold's bull market is far from over. Grandich's presentation is 14 minutes long.
This is another item that I pulled from a GATA release last night...and the link to the youtube.com video is here.
In an essay posted Thursday at GoldSeek, financial writer Doug Casey of Casey Research asks for evidence of gold market manipulation and some explanation of its purpose.
GATA's secretary treasurer Chris Powell picked up that torch...and provided the link not only to Doug's commentary, but to all the evidence that GATA and its consultants have gathered since he and Bill Murphy founded the organization back in 1999.
There's lots to read in the links provided...and its up to each individual reader/investor to weight the evidence presented to them by all parties...not just here in my daily blog, but everywhere they roam on the Internet. As you can tell, there are dissenting voices everywhere and, for the moment, Freedom of Speech is still legal in North America.
Most people that are familiar with this issue have pretty much chosen sides already. I made up my mind long before I ever heard of GATA...or Casey Research...when I read the essay "The Golden Pyramid" by John Hathaway that my friend/full-service broker gave me more than ten years ago. Hathaway knew that something was amiss in the gold market even back then...and it still is. Nothing that I've read or heard since has changed my mind. On the contrary, with the evidence that has been brought to light since, my opinion is more strongly held than ever.
But it's a free country on both sides of the 49th parallel for the moment...and most everywhere else on Planet Earth as well...and everyone is entitled to their opinion, whatever it may be. In the future...and probably in the not-to-distant future...the matter will be settled in both gold and silver. Then Doug and I can compare notes over a glass of Torrontés.
I thank reader Howard Brown for being the first one through the door with Doug's commentary. The link to it...and all the evidence gathered...is posted in this GATA release linked here.
Jamie Dimon said it could get worse...and it is.
The JP Morgan trading loss that was $2 billion four days ago is now $3 billion, report Nelson Schwartz and Jessica Silver-Greenberg in The New York Times.
Why?
Because every hedge fund in the world knows JP Morgan is stuck in a position so big that it can't unwind it... and they're taking the other side of the trade.
Great shades of LTCM...as this is precisely what happened to them when they tried to get out of all their losing trades. Eric Sprott's comments about further loses by JPMorgan in his New York speech yesterday were prophetic. This story was posted on the businessinsider.com website late yesterday evening...and it's worth the read. I thank Roy Stephens for sending this...and the link is here.
It pays to be rich, powerful and a Democrat with friends in Washington. While Anna Gristina, a Connecticut mother accused of being a New York “madam” sits in a cell on Riker’s Island, Jon Corzine, the former CEO of MF Global sits at home in his New Jersey mansion. MF Global had been a publically traded securities firm with $40 billion in assets, but with liabilities even larger, filed for bankruptcy late last year, after being accused of co-mingling customer funds with its own, a flagrant violation of securities law.
As we all know, prostitution is illegal. Ms. Gristina has been charged with providing attractive young women to testosteronic men for money — a crime, but largely victim-less. Nevertheless, she has already spent two months on Riker’s Island, awaiting a June 21st hearing. Bail for her was set at $2 million in a bond, or $1 million in cash. Despite the misappropriation of an estimated $1.6 billion, Mr. Corzine has yet to be charged. Yet 36,000 clients had their money appropriated under his watch. It is hard not to believe that his status as a former Senator from and Governor of New Jersey, and major bundler for President Obama’s campaign has not provided him special privileges. Is not justice supposed to be blind?
It is hard to imagine that Ms. Gristina, whose business was to introduce consenting adults, could be an enormous risk to society. On the other hand, a wealthy and powerful man who appears to have cheated his clients is a fraud and a menace. MF Global was a public company, until it became the nation’s 8th largest bankruptcy when it filed last October. Thus, not only are customers, for whose funds Mr. Corzine had a fiduciary responsibility, out their money, but shareholders of MF Global lost their investment as well. Of course, it is perfectly possible that the morally challenged Mr. Corzine was unaware that embezzling is a crime. However, as CEO he is responsible for financial transgressions within his firm. It is unfortunate that he is not man enough to admit it.
This most excellent essay showed up over at The Daily Reckoning yesterday...and is a hoot to read! Corzine was also involved in the LTCM debacle as well. As one of the 'rescuers'...he knew all their positions...and he and his firm [Goldman Sachs] were betting heavily against them. This guy is a real piece of work, dear reader. Once again I thank Roy Stephens for sharing this with us...and the link is here.
There was a time when retail investors were mocked and derided by all: after all whenever the big boys needed to unload they jest blew the whistle, and like obedient lap dogs retail would buy at the very peak of the market because "stocks are a once in a lifetime buy", leading to what some call distribution, and others, a plunge. Not any more.
In spite of the recent 20% surge in stocks, following a pattern absolutely identical to the one from September 2010 to March 2011, for the entire 32 week duration of the artificial central bank induced rally beginning October 5, there were a total of 3 weeks of inflows into the market, totaling a whopping $2.8 billion. The outflows: 29 weeks for a total of $96.6 billion, with $2.4 billion pulled out in the most recent week.
This short but worthwhile read was posted over at zerohedge.com yesterday...and the graph is worth the trip all by itself. Make sure you click on it so you can view the whole thing. As reader U.D. said..."Has the electronic casino, a.k.a. the stock market lost a key play...the sheeple?" The link is here.
A pattern that we've observed before is how pathetic the stock market has been behaving these days.
Each day we see periods of downs and ups, but in the end, the market ends down, usually fairly near the lows, with miserable performance in the final hour.
Today was no exception, as a nothing day (that at one point was decently higher after the FOMC minutes came out at 2:00 PM ET), turned into a 0.4% loss.
You've just read three of the four short paragraphs of this businessinsider.com piece from yesterday evening. The graph that accompanies the article is definitely worth a quick look. This is another story courtesy of Roy Stephens...and the link is here.
Minutes of the central bank's April 24-25 meeting released Wednesday stated that "several members" thought additional Fed support could be needed if the recovery lost momentum or if the risks to the economy became great enough.
The minutes did not spell out what circumstances would trigger further Fed efforts to lower interest rates to boost the economy. But they did note some threats to the U.S. economy. One is Europe's debt crisis. Another is the risk that spending cuts and tax increases that could take effect at year's end if Congress can't reach a budget agreement could slow growth more than expected.
The comments stood in contrast to the previous minutes, which said that only "a couple" of members expressed support for further bond purchases. Since the financial crisis, the Fed has pursued two rounds of bond purchases to try to push down long-term interest rates, with a goal of encouraging borrowing and spending.
This usatoday.com piece was posted on their Internet site early yesterday afternoon...and I thank West Virginia reader Elliot Simon for sending it along. The link is here.
Europe’s financial crisis lurched into a perilous new phase as dire predictions emerged of a collapse in Greece’s economy, with a run on its banks bringing an inevitable end to its membership of the euro.
As leaders in Athens accepted the need for a new general election to end a national stalemate, the International Monetary Fund said Europe’s leaders should prepare for the possibility of a Greek departure from the single currency.
Christine Lagarde, head of the IMF, warned she was “technically prepared for anything” and said the utmost effort must be made to ensure any Greek exit was orderly. The effect was likely to be “quite messy” with risks to growth, trade and financial markets. “It is something that would be extremely expensive and would pose great risks but it is part of options that we must technically consider,” she said.
This story was posted on The Telegraph's Internet site on Tuesday evening...and I dug it out of yesterday's King Report...and the link is here.
Greece is no longer the main event. Everyone knows it’s a matter of when, not if, ouzoland leaves the euro. Not least the Greeks themselves, who are pulling euros out of local banks at a right lick in preparation for the glorious return of a cheapo drachma.
Bank deposits, already down from €244bn (£195bn) at December 2009 to €171bn at the end of March, are now being withdrawn at the rate of around €3bn a week. In the real world the exit is underway, as another dive in Greece’s benchmark 10-year bond also indicated. It dropped for the 10th day running to just 14.4 cents on the euro.
Rather than trying to keep Greece in, Europe’s politicos, the ECB and the IMF should be focusing on how to contain the impact of its inevitable exit. And, if IMF chief Christine Lagarde, really is “technically prepared for anything”, she must have a solution for Spain.
This story was posted on the telegraph.co.uk website early yesterday evening...and I thank Roy Stephens for sending it along. The link is here. This is worth reading.
Argentina's quest to keep dollars in the country is spawning illegal money trades inside offices and even schools. But big companies have fewer ways to skirt currency controls and must adapt to the country's offbeat, changeable rules.
As the red tape piles up, businesses face delays and distortions that are hitting private investment. Analysts say the tightened state grip could backfire as an economic slowdown cools consumer and corporate spending.
With limited access to dollars on the formal market, individuals and some small companies go in search of greenbacks on the black market, where costs are rising sharply.
This Reuters piece was filed from Buenos Aires yesterday afternoon...and I thank Roy Stephens for sending it along. The link is here.
The cloud cover of sophistry that has been characteristic of India's Iran policy in recent years lifted on Tuesday when the government admitted in parliament that it had taken a policy decision to reduce oil imports from Iran.
The frank admission came on a day when an emissary from Washington, Carlos Pascual, special envoy on energy matters in the United States State Department, arrived with the proclaimed intention of weaning New Delhi away from Tehran's fuel.
The Barack Obama administration will be delighted that the sustained diplomatic and political pressure on India is finally bearing fruit. Tehran, on the other hand, will view this as the unkindest cut of all the blows that New Delhi has inflicted on it over the past five year. Meanwhile, a protagonist lurking in the shade is all excited - Saudi Arabia.
A mystery lingers. What did the Obama administration promise the Manmohan Singh government as quid pro quo? Manmohan most certainly sensitized US Secretary of State Hillary Clinton of India's "wish list" during her recent hurried visit to hold consultations personally with him just ahead of the US-India Strategic Dialogue co-chaired by her, which is scheduled to convene in Washington.
For those of you interested in the new "Great Game"...this is a must read...and is Roy Stephens last offering in today's column. It's posted over at the Asia Times Internet site...and the link is here.
The first is with Rick Santelli...and it's headlined "Traders Taxing JPMorgan to Exit Losing Postions". The second is with technical analyst Louise Yamada. It's entitled "We Now Have Massive Tops on Global Markets". And lastly is this blog with Caesar Bryan of Gabelli & Company...and it's headlined "What Investors Need to Know About Gold & the Mining Shares".
Egon von Greyerz is founder and managing partner of Matterhorn Asset Management out of Zurich, Switzerland. The interview runs about 23 minutes...and is posted on the metallwoche.de website...and the link is here.
Both of these commentaries are imbedded in this GATA release from yesterday...and the link to the GATA release is here.
World gold demand fell 5% to 1,097.6 metric tons during the first quarter compared to the same period a year ago, with jewelry consumption down but investment demand higher, the World Gold Council said in its quarterly trends report released early Thursday.
“It was quite a complex quarter,” said Marcus Grubb, managing director for investment at the World Gold Council.
He pointed out that prices climbed year-on-year despite the lower global demand, including a sharp decline in buying from India, historically the world’s largest consumer. This meant there had to be “a lot of positives” elsewhere for demand to hold up as well as it did, Grubb said. Chinese buying surged, far outpacing India for both gold jewelry and investment, and central banks remained net buyers.
I found this story posted over at the kitco.com website in the wee hours of this morning...and it's definitely worth reading. The link is here.
Okayama Metal & Machinery has become the first Japanese pension fund to make public purchases of gold, in a sign of dwindling faith in paper currencies.
Initially, the fund aims to keep about 1.5 per cent of its total assets of Y40 billion ($500 million) in bullion-backed exchange-traded funds, according to chief investment officer Yoshisuke Kiguchi, who said he was diversifying into gold to "escape sovereign risk."
The move into a non-yielding asset comes as funds in the world's second-biggest pension market are under increasing pressure to meet promised payments, as domestic interest rates remain rooted near zero. This year, the first of Japan's baby boomers turn 65, becoming eligible for payouts.
This story showed up in the Financial Times yesterday...and is posted in the clear in this GATA release. I thank reader 'David in California' for giving Chris Powell and myself the 'heads up' on this FT piece...and the link is here.
